Netflix's biggest competition? Sleep, CEO says

You know that feeling when you want to watch one more episode of Stranger Things or Luke Cage … or go to bed — that’s the biggest competition for Netflix, says CEO Reed Hastings.

Sure, Netflix’s competition in streaming video seems to grow daily. Amazon’s studio won three Oscars for its film Manchester By The Sea — it hits the streaming service May 5 — and will streamThursday Night Football this season. YouTube TV has begun to roll out and Hulu will soon add live channels to its service.

But Netflix’s real competition is sleep, Hastings said during an interview with analysts after the Net TV provider released its first-quarter financials Monday.

When viewers get addicted to a Netflix show, “you stay up late at night,” he said. “We are really competing with sleep on the margin.”

Amazon is “doing great programming and they will continue to do,” Hastings said, “but I’m not sure it will really effect us very much because the market is so vast.”

To put the content and consumer relationship into perspective, Hastings reminds that while Netflix has grown to about 50 million U.S. subscribers, HBO has “continued modestly growing. They haven’t shrunk,” he said. “Why? Well, it’s because we are like two drops of water in the ocean of both time and spending for people.”

With Netflix set to sign up its 100 millionth subscriber worldwide this coming weekend, the service is looking toward the future. “The next 100 million subscribers will be far more likely to be watching on mobile than the first 100 million,” said chief content officer Ted Sarandos.

To that end, Netflix is experimenting with ways to re-scan already-produced programming to appear better on smartphones. The goal? “To basically have faces be larger,” Hastings said. “It’s super-experimental. It’s a neat idea about how to adapt to the future.”